Sebi extends bid deadline for verification job in Sahara case

SummaryThe Securities and Exchange Board of India (Sebi) has extended by a month the deadline for submission of bids by public sector banks and KYC registration agencies to conduct ‘in-person verification’ of about three crore investors in the high-profile Sahara case to ascertain their genuineness.

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The Securities and Exchange Board of India (Sebi) has extended by a month the deadline for submission of bids by public sector banks (PSBs) and KYC registration agencies (KRAs) to conduct ‘in-person verification’ of about three crore investors in the high-profile Sahara case to ascertain their genuineness.

Sebi had floated a tender on November 2 and had earlier asked the PSBs and KRAs to submit their applications by November 22.

However, Sebi has now decided to extend the deadline for submission of bids to December 21, and would open the technical bids on the same day. Earlier, the technical bids were scheduled to be opened on November 22, while a pre-bid meeting was held by Sebi with the interested parties on November 7.

The selected ‘in-person verification (IPV) agency’ would be mandated for face-to-face to interaction with all investors in the Sahara case to ascertain their genuineness. Sebi has been mandated by the Supreme Court to facilitate a refund of about R24,000 crore with 15% interest to the bondholders of two Sahara group firms after ascertaining their genuineness.

In August 31 order, the Supreme Court had asked Sebi to ascertain the genuineness of an estimated three crore bondholders of optionally fully convertible debentures (OFCDs) of Sahara Housing Investment Corporation and Sahara Real Estate Corporation and thereafter facilitate the refund along with the interest.

In this regard, Sebi has decided to carry out in-person verification of these bondholders, for which it is seeking the services of an IPV agency.

The KRAs are authorised agencies to carry out KYC (know your client) requirements for all the market entities, including brokerage firms and mutual funds.

The selected IPV agency would have to meet the bondholders to establish their existence, visit their address to verify that the proof of residence offered vis-a-vis the details provided.

The IPV agency would also have to get the copies of identity/address proofs signed by the bondholders and verify the documents related to investment in OFCDs vis-a-vis details provided by Sebi and its agencies.

Sebi is also in the process of appointing investigating agencies to assist it in this matter, while it is also hiring a registrar and transfer agent (RTA) for investor data and payment processing related works in the case.

The RTA’s job would involve scanning and verification of investor documents, setting up and managing of toll-free investor helpline and grievance redressal cell and processing of payments to the genuine investors.